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Last Updated: Thursday, 24 June, 2004, 00:04 GMT 01:04 UK
Bad winter 'threatens gas supply'
Bacton Terminal
The report calls for more pipelines linking the UK with Europe
UK gas supplies could be under threat in extreme conditions, according to a House of Lords report.

Despite reassurance from the Energy Minister, Stephen Timms MP, peers have urged the government to examine the gas market's ability to cope.

In its report it said pipelines bringing gas into the UK have little spare capacity in the short term.

It recommends new procedures for dealing with disruption and speedy re-connection if customers get cut off.

Supplies

"Ofgem believe supplies are adequate except in extreme conditions - it is the extreme conditions we worry about," said Lord Woolmer of Leeds, chairman of the committee that conducted the inquiry.

Report conclusions
Need EU gas market liberalisation
Gas prices to rise with demand
More LNG would be imported into EU and UK
Global supplies ample
Investment needed for more gas pipes
The report explained that Transco had the physical capacity to transport a high-surge demand for gas, but the pipelines bringing gas into the UK had little spare capacity.

New capacity to import more gas is being built but this will not go far enough, the report says.

"Even when new import schemes start operating in 2007, we still question whether a market-based, 'just-in-time' system will provide insurance against the one-in-twenty year peak demand that Transco is legally obliged to meet."

The EU is a net importer of gas and it is expected by 2010 that 60% will come from outside the region.

Measures

Measures to liberalise the gas market in the EU have already been introduced by the European Commission.

The latest is a draft regulation which governs conditions for third party access to transmission systems.

Despite adequate supplies predicted for the EU over the next 20 years and liberalisation reinforcing security of supply, the report raises concerns about the UK in the short term.

Peers said they were uneasy about conditions in the UK over the next two to three winters, where supply and demand balance is already tight.

It concludes that substantial investment is needed to build pipelines and bring in more gas from countries outside the EU and UK.


SEE ALSO:
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